🚀 go-pugleaf

On Aug 31, 8:17 am, oldtrout <no_...@home.ca> wrote:
> Alan Baggettwrote:
> > A Small Victory for Common Sense :CRA SOTW
>
> > Taxman shouldn't bite the hand that feeds
> > Home Depot's tax appeal is one small victory for common sense amid a
> > bureaucratic tax system grown horribly and needlessly complex
>
> > Neil Reynolds - Friday, Jun. 05, 2009 12:00AM EDT
>
> > The facts of the case, Home Depot v. The Queen, were not in dispute.
> > Tax Court of Canada Judge Campbell J. Miller summarized them
> > efficiently last week when he rendered judgment.
>
> > "Home Depot of Canada Inc. collects and remits GST for the Government
> > of Canada," Judge Miller noted. "Since 2005, it has contracted out its
> > GST compliance requirements to Deloitte Tax LLP, a U.S.-based
> > organization in the business of completing and remitting sales tax
> > forms and payments for major organizations across North America.
> > "With two exceptions, Home Depot has filed on a timely basis and has
> > remitted a great deal of money. The two exceptions were the November
> > 2005 filing (due at the end of December) and the January 2006 filing
> > (due at the end of February). Due to a clerical error, Deloitte Tax
> > sent the returns to the Canada Revenue Agency at an incorrect address.
>
> > "When this [error] was discovered, in March and September
> > respectively, Home Depot immediately took steps to file and to pay,
> > and did so in March and September, 2006.
> > "The Canada Revenue Agency assessed late-filing penalties pursuant to
> > subsection 280 of the Excise Tax Act in the amounts of $77,097 and
> > $326,223 for the periods in question."
> > In essence, the CRA hit Home Depot with a penalty of more than
> > $400,000 because the company that Home Depot hired to process its tax
> > remittances made a clerical error.
> > Ladies and gentlemen of the jury, how do you find?
>
> > On the one hand, you have a company with an impeccable record of
> > collecting taxes on behalf of the federal government - and two cheques
> > sent by overnight courier to a wrong address. One of the misguided
> > cheques was for $5-million, the other for $9.5-million. And you have
> > prompt fixing of the mistakes.
>
> > On the other hand, you have subsection 280 of the Excise Tax Act,
> > which authorizes the CRA to impose penalties on any company that
> > misses a deadline, regardless of the reason.
>
> > Much of the evidence in Home Depot's appeal dealt with Deloitte Tax's
> > procedures for handling GST returns. The legal issue was this: Does
> > any error whatsoever constitute incompetence? Does it constitute
> > negligence? Senior Deloitte Tax executives testified that the company
> > assigned its most experienced team to the Home Depot file because it
> > was such an important client.
>
> > Deloitte is the largest tax compliance company on the continent and
> > provides its service to 160 major corporations, 20 of them Canadian.
> > It employs scores of professional and clerical staff to prepare and
> > file the returns of its Canadian clients alone. For Home Depot in
> > North America, the company files 730 separate tax returns a month -
> > 8,760 a year. (Home Depot's tax lawyers are an entirely separate
> > operation.) Judge Miller described the company as "a well-oiled sales-
> > tax-remitting machine."
>
> > The CRA normally rejects due diligence - or doing one's best - as an
> > argument by corporate taxpayers, a practice that Judge Miller
> > suggested amounts to a requirement for perfection. "Even in the best
> > system," he observed, "there is room for human error."
> > His judgment in favour of Home Depot was straightforward - and
> > comforting. It's reassuring to know that common sense can still,
> > occasionally, prevail against an expansive bureaucracy. A few excerpts
> > from his ruling: "Here is a corporate taxpayer, remitting millions of
> > dollars monthly to the government, and paying experts to do so, to
> > meet the collection obligations imposed on it by the government.
>
> > "A clerk mistakenly addresses two remittances. Once Home Depot
> > discovers its error, it immediately re-remits. It pays interest.
>
> > "What does the Canada Revenue Agency do? It imposes a half-million-
> > dollar penalty and then pursues the matter through the litigation
> > process to a trial.
>
> > "A step back for a balanced look by a CRA official, exercising a good
> > dose of commercial common sense, should not have resulted in the
> > relentless pursuit of a half-million-dollar penalty. Yes, the Act
> > stipulates that taxpayers are to be penalized for remitting late - but
> > do not bite the hand that feeds you when the hand tries so diligently
> > to ensure that you get every mouthful.
>
> > "It is easy to be critical of behavior after an error has been
> > committed. In considering whether a taxpayer acted with due diligence
> > to minimize the possibility of error, one can always find something
> > else that the taxpayer might have done. But that is not the test. The
> > test is whether what the taxpayer in fact did was sufficient
> > reasonable precaution - not that the taxpayer did not hold the hand of
> > the employee [who made the mistake] throughout every single task, no
> > matter how menial, although Deloitte Tax went a long way to doing
> > exactly that."
>
> > Judge Miller upheld Home Depot's appeal and cancelled the fines - one
> > small victory for common sense amid the intellectual bewilderment and
> > regulatory confusion inherent in a bureaucratic tax system grown
> > horribly and needlessly complex.
>
> > reynolds.gl...@gmail.com
>
> > -----------------------------------------------------------
> > Miss a Tax Tale Miss a lot!
> > Visit the CRA SOTW Library athttp://canada.revenue.agency.angelfire.com
> > ------------------------------------------------------------
> >Alan Baggett– Tax Collector’s Bible
>
> Bravo Zulu for Judge Miller
>
> --
> oldtrout - àrsaidh-breac
>       Gum bi si\th leat- Hide quoted text -
>
> - Show quoted text -

Bravo indeed!